Mitch McConnell and the Corporate War on Transparency

Posted on:July 16, 2012 - 5:29pm

Senator Mitch McConnell argued in 1987 that we should reject limits on corporate campaign contributions and instead, embrace public disclosure of campaign contributions important “so,” he said, “voters can judge for themselves what is appropriate.” He was right. Telling voters about the sources of political campaign contributions would help them understand about the influences on our elected representatives, and hopefully level the playing field between the powerful and the powerless in society.

But this week, McConnell is leading the fight against the DISCLOSE act that would plug legal loopholes that allow campaigns to keep their donors anonymous.

McConnell argues that disclosing the multi-million dollar mega-donations from corporations and America’s millionaires and billionaires to secretive groups running political attacks ads is somehow a violation of their free speech rights. In other words enlightened, informed democracy is, well, anti-democratic.

The importance of an informed public – and especially an informed voting public – is enshrined in our nation’s civic values and governing statutes such as the Freedom of Information Act and federal and state campaign donor disclosure laws.

Yet even these forward thinking laws failed to anticipate the complex schemes flooding staggering sums of money into American politics from corporations and the wealthy.

Tax exempt groups such as Karl Rove’s Crossroads GPS and the Chamber of Commerce are taking advantage of blind spots in the U.S. tax code that allows these groups to run “issue based” attack ads without being subjected to the donor disclosure requirements by the Federal Elections Commission that candidates and independent political expenditure campaigns must follow.

While most of the donations are done in secret, some have been made public by investigative journalists, political watchdog groups and, in some case, voluntary disclosures. For example, Aetna Insurance gave more than $3 million last year to the American Action Network that spent millions attacking Obama’s health care bill. American Electric Power gave $1 million last November to the new Founding Fund, set up by former Koch Industries staffers whose lobbying firm represents Wal-Mart and the American Chemistry Council. The Chamber of Commerce has received millions from corporations including Prudential Financial, Merck and Dow Chemical to fund the Chamber’s $50 million political advertising budget this year.

Lacking disclosure rules, these corporate-funded groups provide anonymity for some of the wealthiest Americans and most well-known corporations as they spend millions to fight popular clean air laws, consumer protections against predatory lending, and a host of other common sense safeguards for consumers, workers and the environment.

It’s safe to assume that if they don’t want their donations to be disclosed then they must be hiding something. Their fear is that informed voters will reject the power grab of the already too powerful, just as consumers rejected unsafe and unhealthy food, dangerous toys and risky drugs once the ingredients and dangers were disclosed by earlier laws.

Industry lobby groups consistently opposed the laws that give us the right to know basic and truthful information about the contents of products we purchase and the food we eat, the cancer-causing toxins we work with in our jobs, the prescription drugs we take, the unhealthy pollution in our neighborhoods and more. They argued that information was unnecessary, would confuse people, or was just another burdensome job-killing government mandate. Fortunately, in each case, sunlight won and secrecy lost.

In the early 1900s, after Upton Sinclair’s 1906 novel The Jungle raised awareness about unsanitary and unsafe conditions in Chicago’s slaughterhouses and meatpacking plants, the meat packing industry fought requirements that labels on canned meat include date stamps. Meat processors regularly removed labels from old cans and heated them to “liven up” the contents before putting on new label. Thomas Wilson, a meat packing industry spokesperson, argued “[m]eat canned five years ago is just as good as meat canned six months ago…. [the date on the can] benefits nobody if the meat is just as good with age, like whisky is said to be, as it is without.” Congress rejected the meatpacker’s arguments and passed the Meat Inspection Act of 1906 that required the date stamps.

Concerns about unsafe drugs led Congress to pass the 1962 Kefauver-Harris Act amendments to the Food, Drug and Cosmetic Act that required that drug makers include information on toxic and serious side effects in their advertising to doctors. Drug makers opposed the requirement as unnecessary and impractical. Eugene Beasley, President of Eli Lilly, testified that the information would have “no practical benefits to physicians or patients.”

Growing complaints about confusing and misleading credit terms led to the 1968 Truth in Lending Act that forced consumer credit companies to disclose all finance charges and extra fees and use a “simple annual interest rate” so consumers could easily compare the cost of borrowing. With surprising candor, the Chamber of Commerce complained that "[t]he old practice of some loan companies advertising money 'at 6%' when actually borrowers pay 20 or 30 percent, could be ended by the so-called truth-in-lending bill. This legislation moreover would be an impractical burden on all sorts of businesses and institutions that lend or extend credit."

The chemical industry opposed a 1983 OSHA requirement that workers be given detailed information about toxic, cancer-causing chemicals they handle in the workplace. “[The OSHA right-to-know regulation would create] virtually unmanageable burdens on small manufacturers….workers would be just as safe without this regulation” complained Ralph Engel, spokesperson for the Chemical Specialties Manufacturers Association.

The 1986 Emergency Planning and Community Right to Know Act created a public database of toxic materials used and released in industrial areas that could expose nearby residents to dangerous pollution. Polluting companies feared that information would lead to demands for them to reduce their toxic emissions. “The costs to small businesses of measuring such emissions would be staggering,” predicted B. Michel Robin, of the Independent Lubricant Manufacturers Association.

The junk food industry opposed the 1990 The Nutrition labeling Act that led to the Nutrition Facts labels that detail the fat, sugar, cholesterol and salt content of the foods we purchase. They argued that their food is healthy, that too much information (particularly about fat and sugar content) would confuse consumers, and that it would be costly and “virtually impossible” for food manufacturers to implement. They also argued that requirements for health claims on food packaging to be accurate and not misleading would take away the free speech rights of businesses.

Each these laws passed over the objections of industry and are now popular, common sense protections we all rely upon and take for granted.

Industry opposition to product, pollution and workplace disclosure laws is laced with irony. On one hand, they argue that free markets are the best way to ensure economic growth and to solve our problems. Yet, on the other hand, the fight laws that would give people information necessary for well-functioning markets.

Likewise, corporations and their political allies argue for government transparency yet oppose information essential to a functioning democracy. Democracy is threatened when voters don’t know who’s behind multi-million dollar political attack ads so they can evaluate the content of the ads and the motivations of the ad buyers and what they hope to gain.

Opinion polls show that Americans believe that government serves the interests of the wealthy and powerful over the needs of the many. Disclosing who is paying for these attack ads would make clear just how true that is and therefore just might influence how people vote – as it should.

In the end, the secrecy campaign is a straightforward effort to preserve and protect corporate power and influence. It’s about winning in politics and success in the marketplace.